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Earlier discussion

The good, the bad, the ugly Add to ...

1:03 Rob Carrick: OK, Paul and Bill. Here's the deal. Online brokers are rotten when it comes to bonds. It's almost as if they're trying to make back some of the commission money they're losing out on for stocks.

For those who don't know, the price you pay for bonds includes an invisible markup applied by the broker. You might be able to negotiate this markup down with a full-service broker, but this is unlikely with an online broker. Are any online firms better than others? Not as far as I've noticed. I will at least credit TD Waterhouse and a few others for at least having the decency to show the buy and sell prices for bonds so clients can see the markups plainly.

Bill, I think large bond purchases may get you a little break on commissions. Not sure of the threshold, but six figues would certainly be a help.

1:03 [Comment From Ian: ]Can we trade stocks within TSFA accounts? What happens if we have capital losses in these accounts?

1:05 Rob Carrick: Hi Ian. For sure, you can trade stocks in a tax-free savings account. In fact, I'm hearing these days from happy investors who bought stocks in their TFSA back in January and February and have seen major price gains since then. And what happens if your TFSA stocks fall in value? Unfortunately, you can't apply the losses against your capital gains, as you can in an unregistered type of account.

1:05 [Comment From SAM K.: ]Hello Rob, and thank you for doing this Q&A. I was wondering where you recommend I go to get more information and general advice both on Investing and Finance. Are there courses or institutions I should look up?

1:11 Rob Carrick: Hi Sam. Good on 'ya for asking about how to learn more about investing. A lot of people are signing up for online brokerage accounts these days it's a cinch that a good number of them could use some educational assistance. Three good websites:

-our very own Globe Investor has lots of educational material on it, as well as extensive coverage of what's happening on the markets

-the Investor Education Fund, a non-profit offshoot of the Ontario Securities Commission, has tonnes of info that is tailored to investors all levels of knowledge

-also try Investopedia

1:19 Globe and Mail: Thank you, everyone, for having joined us today. Special thanks to you, Rob! That was really enlightening.

1:19 Rob Carrick: Thanks, everyone. One of the more interesting stories of the past year of stock market ups and downs has been the strong, sustained interest in online brokers. Is it a passing fad, or a game-changing trend? I'll be watching. Meanwhile, I welcome comments from both newcomers and veterans on what's good and bad about their firms.

1:20 Globe and Mail: And don't miss our discussion on DIY investing tomorrow with personal finance writer Gail Bebee. See you then!

Our Online Investing series:

  • Rise of the kitchen table traders
  • Stop-loss is designed to save your skin
  • Five tips for managing your investments
  • The rapid rise of an indie brokerage
  • Only a group effort can prevent investor fraud
  • Like investing, teaching it is best done early, often
  • Park your cash here while you learn the ropes


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